Brief Summary
Fab India is a 60-year-old fashion giant with a valuation of ₹16,000 crores and annual revenue of ₹1,600 crores. The company is known for its ethnic wear and has revolutionized the retail industry by scaling India's rich artisan crafts at a mass retail level. Fab India supports the lives of 50,000 artisans and 10,000 farmers. The video explores three core insights behind Fab India's success: their unique retail strategy, their focus on building trust with artisans, and their SKU diversification strategy.
- Fab India's unique retail strategy involves a heavy focus on exclusive brand outlets (EBOs) and a company-owned and operated model (COCO).
- Fab India has built trust with artisans by actively developing craft clusters and providing them with training, financial literacy, and access to their supply chain.
- Fab India has diversified its SKU mix by expanding into categories like home products, organic food, personal care, and handcrafted jewelry.
Fab India's Story
Fab India was founded in 1958 by an American entrepreneur, John Bissell, as an exporting company of home furnishings. Bissell came to India on a Ford Foundation Grant to advise India's handicrafts board and cottage industries. He was impressed by the richness of India's craftsmanship and decided to stay in India and start Fab India. The company's initial focus was on exporting goods to foreign countries and putting India on the world map. In the 1990s, after John Bissell passed away, his son William Bissell took charge and saw an opportunity to make Fab India a retail giant. He recognized the changing Indian economy and the growing consumption patterns. Fab India shifted its focus from exporting to creating a semi-premium brand that would cater to modern Indian customers. This was a bold move considering the increasing westernization of the Indian apparel market. Fab India believed that ethnic wear would never go out of fashion and that there was a large market for it.
Unique Retail Strategy
Fab India has a unique retail strategy that involves a heavy focus on exclusive brand outlets (EBOs) and a company-owned and operated model (COCO). The company has over 320 stores in India and 10+ international stores. Fab India believes that physical stores are essential for establishing a special bond with customers and allowing them to experience the quality of their handwoven and hand-printed items. They have a strong network of EBOs, which drive 80% of their revenue. Fab India also has experience stores, which are larger and offer a wider range of products and services, including customization, design studios, kids' play areas, and Fab Cafes. The company prioritizes customer experience and aims to create a unique and immersive shopping experience for its customers.
Types of Retail Models (COCO, FOFO, EBOs, MBOs)
Retail models can be categorized based on two parameters: ownership and brand exclusivity. In terms of ownership, there are two main models: company-owned and company-operated (COCO) and franchise-owned and franchise-operated (FOFO). In a COCO model, the company owns and operates the store, while in a FOFO model, the company grants franchise rights to other individuals or entities. There are also complex combinations, such as franchise-owned company-operated (FOCO) and company-owned franchise-operated (KOFO). Fab India has chosen a COCO model, which allows them to maintain control over the customer experience and ensure brand consistency. In terms of brand exclusivity, there are two types of outlets: multi-brand outlets (MBOs) and exclusive brand outlets (EBOs). MBOs are large format stores that carry products from multiple brands, while EBOs are single-brand stores that only sell products from one brand. Fab India has a strong focus on EBOs, which allows them to showcase their products and brand identity in a dedicated space.
How does Fab India earn trust?
Fab India's success is built on the trust it has earned from its artisans. The company has a network of 50,000 artisans from 21 states and 12,000 farmers from five states. They work with these artisans through a network of 900 third-party contractors. Fab India has actively worked on developing craft clusters through various programs, such as the Craft Cluster Development Livelihood Impact Program. This program involves identifying crafts in villages, providing training and upskilling to artisans, offering financial literacy, giving trial orders, and integrating them into the supply chain. Fab India also conducts quality checks to ensure that the artisans meet their standards. This approach has helped Fab India build trust with artisans and ensure the quality of their products.
What are Clusters?
Clusters are small communities that practice a specific craft in a particular area. There are roughly 750 clusters in India, employing over 2 lakh artisans. Fab India has played a significant role in developing these clusters by providing support and resources to the artisans. This has helped to preserve traditional crafts and empower artisans.
SKU Diversification
Fab India has diversified its SKU mix by expanding into categories beyond apparel. They have launched home products, organic food, personal care, handcrafted jewelry, and even home and design services. This diversification strategy has helped Fab India to become a lifestyle brand rather than just an apparel brand. They have created separate brands for each vertical, such as Fab Essentials for personal care, Organic India for organic food, and Fab Cafes for dining. This allows them to target different customer segments and build brand recognition in each category. Fab India has also acquired brands, such as Organic India, which aligns with their values and expands their reach. This diversification strategy has helped Fab India to grow its business and become a more sustainable and resilient company.
